More Spending on Media Content to Engage Audiences Seems Imminent

AT&T® is expecting a structure that is more streamlined at its WarnerMedia arm will let it invest enough in media content to take upon Netflix®. The streaming giant has been AT&T’s rival too, since the Dallas-based telecommunications company acquired Time Warner® in one of the best cable deals of the recent times.

After the CEO of HBO®, Richard Plepler, and the President of Turner, David Levy, left, AT&T’s media division hired Robert Greenblatt to oversee Turner’s entertainment networks and HBO®, in addition to its planned OTT offering.

“At a time when we must shift our investment focus to develop more content for specific and demanding audiences on emerging platforms, we can’t sustain a model where we invest one dollar more than necessary in the administrative aspects of running our business,” John Stankey, WarnerMedia’s CEO, said in a memo.

Other changes comprised separating the CNN network from the rest of the Turner company and putting CNN’s President, Jeff Zucker, in charge of Turner Sports. In addition, Kevin Tsujihara will remain at the helm of Warner Bros. and add programming for kids’ and young adults to his plate.

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The Dallas-based fastest internet provider wants to take one leaf out of the streaming giant’s book. Netflix® released about 700 original films, web series, and specials last year, and spent around 14 billion dollars upon content. In contrast, HBO® spent around 2 billion dollars annually upon content before AT&T’s acquisition of its parent company.

The Telco’s media arm has announced plans to extend the original programming lineup of HBO® to Monday nights. That is despite objections HBO® is already lucrative, with a selection of top-quality programs airing upon Sunday nights. However, this is about much more than HBO® – hence, the restructuring to comprise all of the media division’s television entertainment under Robert Greenblatt. John Stankey is also looking to increase engagement among audiences to a great extent.

A large increase in scale might just be tricky for AT&T® since the company is trying to pay down the huge debt, which it incurred as it bought DIRECTV® and Time Warner® after that. It is not as if it can scrounge up an additional 10 million dollars all of a sudden to take upon the scale of the content spending of Netflix®. WarnerMedia has some very valuable media assets at their disposal for attracting audiences to its upcoming OTT service but management appears split upon how they plan to use them.